Pacific Aggregates, Inc.

DECISIONS OF NATIONAL LABOR RELATIONS BOARD Pacific Aggregates, Inc. and its affiliates, including Franklin Material Company and Local 513, Inter- national Union of Operating Engineers, AFL- CIO. Case 14-CA-8809 August 8, 1977 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS MURPHY AND WALTHER On March 2, 1977, Administrative Law Judge Sidney J. Barban issued the attached Decision in this proceeding. Thereafter, the Respondents filed excep- tions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the record and the attached Decision in light of the exceptions and brief and has decided to affirm the rulings, findings,' and conclusions 2 of the Administrative Law Judge and to adopt his recommended Order. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the recommend- ed Order of the Administrative Law Judge and hereby orders that the Respondents, Pacific Aggre- gates, Inc. and its affiliates, including Franklin Material Company, Valley Park, Missouri, their officers, agents, successors, and assigns, including Ned L. Abernathy and/or Boulder Sand and Gravel Company, Gray Summit, Missouri, shall take the action set forth in the said recommended Order. The Respondents have excepted to certain credibility findings made by the Administrative Law Judge. It is the Board's established policy not to overrule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dr) Wall Products, Inc. 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. The name "Republic" at sec. Ill, par. I of the Administrative Law Judge's Decision is hereby corrected to read "Pacific." 2 In the absence of exceptions thereto, we adopt pro forma the Administrative Law Judge's determinations concerning Boulder Sand and Gravel Company. DECISION STATEMENT OF THE CASE SIDNEY J. BARBAN, Administrative Law Judge: This matter was heard at St. Louis, Missouri, on February 26, I This case was continued from February 26 because of an asserted confusion of dates that prevented a principal officer of Respondents, James P. Blind, involved in the alleged violations, from being present. The matter 231 NLRB No. 45 March 22, and August 24 and 25, 1976,1 upon a complaint issued against the above-named Respondents on January 20, 1976, based on charges filed by the above-named Charging Party (herein the Union) on September 22, 1975. The complaint alleges that the Respondents, an asserted single-integrated enterprise in which each is allegedly the alter ego of the other, violated Section 8(aX5) and (1) of the Act, by withdrawing recognition from the Union as the bargaining representative of Respondents' employees at Respondents' facility known as "Gray Summit," in an appropriate bargaining unit, and by failing and refusing to apply the terms of a collective-bargaining contract with the Union to such employees at Gray Summit. Respondents' answer denies the commission of the alleged unfair labor practices. On April 9, 1976, the Union filed an amended charge in this matter against Ned Abernathy and Associates d/b/a Boulder Sand and Gravel Company, successor to and/or alter ego of Pacific Aggregates Co. and its affiliates, including Franklin County Materials Co. Thereafter, on April 22, 1976, General Counsel filed a motion requesting that the pleadings in this case be amended "to include Ned Abernathy and Associates d/b/a Boulder Sand and Gravel Company, and any and all other successors and assigns of Respondent Pacific Aggregates, Inc. and its affiliates, including Franklin Material Company in any remedial Recommended Order which may issue. ... " On June 21, 1976, after due consideration of the response of Boulder Sand and Gravel Company (herein Boulder) made in opposition to the motion, I ordered that the hearing in this matter be reopened to determine "whether Ned Abernathy and Associates d/b/a Boulder Sand and Gravel Company, or any other claimed successors and assigns of Pacific Aggregates, Inc., Franklin Materials Company, or their affiliates should be included as a party obligated to comply with and to execute any remedial order which may issue in this matter." Upon the entire record in this case, from observation of the witnesses and their demeanor, and after due consider- ation of the briefs of the General Counsel, the Respon- dents, and Boulder, I make the following: FINDINGS AND CONCLUSIONS I. THE COMPANIES; JURISDICTION; THE LABOR ORGANIZATION A. The Respondents The evidence (G.C. Exh. 2) shows that Pacific Aggre- gates, Inc., Bayless Company, and Brockway-St. Louis, Inc., at times material, had interlocking officers, directors, and ownership. In particular, James P. Blind, Eugene J. Henry, and Lon Hocker were, respectively, president, vice president, and secretary of each of these companies. In February 1975, several officers and directors of Pacific organized and incorporated Franklin Material Company, acquired equal shares of its stock, and appointed Byron was reopened on August 24 on the motion of General Counsel discussed hereinafter. 214 PACIFIC AGGREGATES, INC. Schmidt, a former employee of Brockway, to the position of president of Franklin. Pacific is a Missouri corporation with its principal office and place of business at Valley Park, Missouri (also known as, and referred to herein as, Peerless Park), where it is "engaged in the mining production and non-retail sale of sand, gravel, concrete, and related products." Pacific also maintained until November 1974 "a mine and place of business in Gray Summit, Missouri [herein Gray Summit] where employees of Pacific Aggregates, Inc., under the supervision and control of said corporation, engaged in the mining production of sand, gravel and related products." Beginning in February 1975 until December of that year Franklin operated Gray Summit, under lease from Pacific, where Franklin was engaged in the mining production and nonretail and retail sale of sand, gravel, concrete, and related products. Franklin leased the sand and gravel equipment used at Gray Summit from Pacific, and also a portable ready-mix concrete plant used at that facility from Brockway. During periods material, Pacific has been a member of a multiemployer organization, The Sand and Gravel Produc- ers Association of Greater St. Louis, which collectively bargains and executes labor agreements on behalf of its members. During a recent representative annual period, the members of the association, individually or collectively, had delivered to their respective places of business in Missouri, directly from outside the state goods, materials and services valued in excess of $50,000. It is stipulated that the association is engaged in commerce within the meaning of the Act. During 1975, Franklin made total sales of sand, gravel, concrete, and related products of a value in excess of $100,000, of which somewhat more than half was derived from sales of sand and gravel, and slightly less than half from sales of ready-mix concrete. Based on the above, and the record as a whole, it is found that the Respondents named above constitute, for the purpose of this proceeding, a closely integrated enterprise engaged in commerce within the meaning of Section 2(6) and (7) of the Act. B. Boulder and Affiliated Companies Boulder, Pacific Ready-Mix Company, and Union Ready-Mix Company are Missouri corporations, which were stipulated to be affiliated businesses with common officers, ownership, directors, and operators, and for the purposes of NLRB jurisdiction only constitute a single- integrated business enterprise. In particular, Ned L. Abernathy, vice president of Boulder, holds one or more executive offices with each of the other two companies. During times material both Pacific Ready-Mix, at Pacific, Missouri, and Union Ready-Mix, at Union, Missouri, have been engaged in the production, sales, and distribution of ready-mix concrete and related products. Boulder was incorporated in March 1976 to operate the Gray Summit facility (formerly operated by Pacific and Franklin), where Boulder is engaged in the mining production and retail and nonretail sale of sand, gravel, and related products, the great majority of which is furnished to Pacific Ready-Mix and Union Ready-Mix for the production of ready-mix concrete. Boulder, Pacific Ready-Mix, and Union Ready- Mix, in the course of their business operations, together annually sell and ship goods and materials valued in excess of $50,000 to firms in the State of Missouri whose operations satisfy an appropriate standard of the Board for the assertion of jurisdiction based on direct inflow or direct outflow. It is stipulated, and I find, that Boulder is now and has been at all times material an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. C. The Union Based upon the answer to the complaint and the evidence in the record as a whole, I find that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. SUMMARY OF THE FACTS AND ISSUES A summary of the undisputed facts will serve to point up the issues in the case. On June 1, 1968, at a time when Pacific was operating both the Peerless Park and the Gray Summit facilities for the production of sand and gravel, Pacific executed a collective-bargaining agreement with the Union. Pacific contends that agreement, and the successor agreements, the last of which expires on April 30, 1978, were intended to apply only to the operations at Peerless Park and do not apply to the operations at Gray Summit. The Union, and General Counsel here, contend that these agreements applied and continue to apply to both opera- tions. These contentions will be considered in some detail hereinafter. In the latter part of 1974, Pacific closed down the Gray Summit facility. As noted, in February 1975, officers of Pacific formed Franklin which reopened the Gray Summit operation in March 1975. Byron Schmidt, who was appointed the head of Franklin and the manager of the Gray Summit operation, hired Houston Martin, Jr. (herein Martin Jr.), and Houston Martin III (herein Martin Ill), who had previously operated Gray Summit for Pacific, to work at that facility for Franklin. However, Schmidt advised the Martins that he intended to run Gray Summit nonunion, and required that they take withdrawal cards from the Union before they could work for Franklin at Gray Summit. The Martins did so. Franklin did not apply the union agreement to its operations at Gray Summit. Respondents contend that Franklin was formed in order to start a ready-mix concrete operation at Gray Summit using sand and gravel mined there. Pacific had not previously operated a ready-mix plant at Gray Summit, although it appears that Bayless had operated such a facility at or near Peerless Park and, as noted, it was stipulated that Pacific had produced concrete at the latter location. Respondents assert that Franklin's operations at Gray Summit were substantially different from that of Pacific at the same place, and thus that the union agreement should not in any event apply. In September 1975, the Union filed a charge with the Board alleging that Respondents' failure and refusal to apply the union bargaining agreement to the Gray Summit 215 DECISIONS OF NATIONAL LABOR RELATIONS BOARD operation violated the Act. In December 1975, the Gray Summit operation was closed, Respondents asserting that it had been unprofitable. Complaint in this matter was issued in January 1976 and this matter came on for hearing on February 26, at which time the case was continued at the request of Respondents. Unknown to the other parties at the time, Pacific was then negotiating with Ned L. Abernathy to lease the Gray Summit sand and gravel operation. It is asserted that an oral lease of the real estate and some equipment was entered into between Pacific and Abernathy on March 5, 1976, and that Abernathy was not aware at that time of the dispute over the application of the Union's contract to Gray Summit or that a complaint had been issued alleging that the Act had been violated by Respondents' failure and refusal to apply the contract to those operations, or that a hearing had begun on those allegations. It is admitted that when Abernathy executed a written lease in May 1976, on behalf of Boulder, he was aware of the dispute and the Board's proceedings. Abernathy employed Martin Jr. and Martin III to operate the Gray Summit facility for Boulder, on different terms from those they had received from either Pacific or Franklin. Though Boulder leased some of the equipment at Gray Summit owned by Pacific and used by Franklin, some of the equipment, and in particular the ready-mix plant, was removed by Pacific. Boulder purchased some new equipment, different in size or capacity from that removed by Pacific, though similar in type and purpose, to replace some of the equipment removed. Boulder, as noted, has only produced sand and gravel at Gray Summit. Boulder contends that it is conducting a substantially different operation at Gray Summit from that of Franklin, using much of its own equipment, and selling basically to different customers (i.e., Pacific Ready-Mix and Union Ready-Mix) from Franklin, and therefore cannot be considered a legal successor to Franklin obligated to remedy any unfair labor practices that may be found as General Counsel contends. Boulder also contends that Martin Jr. is employed as a supervisor within the meaning of the Act, and thus the Board should not require it to recognize and deal with the Union in a one-man unit. 2 11. THE APPLICATION OF THE CONTRACT To the extent that there is conflict between the testimony of James P. Blind, president of Pacific, and James LaMartina, previously a business agent of the Union, with respect to the circumstances under which Republic came to sign a bargaining agreement with the Union, I credit LaMartina. I am not satisfied that the recollection of either 2 However. Boulder in support of its contention that Martin Jr. is a supervisor, also relies on the fact that some part-time employees have been employed from time to time. Abernathy testified that he anticipated the need for further employees. :f The denial was made on rebuttal, after Blind's testimony. On LaMartina's original cross-examination, he testified that he had had no recollection by whom or why the words were inserted. He was then asked, "It could have been that Mr. Blind could have signed the contract after you left and mailed it in and you listed Peerless Park under Pacific Aggregates," to which he answered, "It is possible." Considering the complexity of the question, and the record as a whole, I do not believe that this detracts from LaMartina's denial. of them concerning these matters is as sharp as it might be, but LaMartina impressed me as a credible witness. He no longer holds a position with the Union, but is employed as a Federal mediator, and thus has no present interest in the outcome of the litigation, whereas Blind, of course, has an immediate interest in the case. Further, as noted hereinaf- ter, at the critical point, the probabilities lie with LaMarti- na's version. LaMartina left completed copies of the Union's standard contract at Blind's office for the latter's consideration. This agreement, which covered a unit of "engineers, oilers, firemen, mechanics, mechanics helpers and exempting executives, supervisory employees, superintendents and foremen, technical and research employees, office workers, and watchmen, and those employees holding the classifica- tion of laborers," was already signed by officers of the Union. Respondents agree that this constitutes an appro- priate unit within the meaning of the Act. (G.C. Exh. 2, par. 8) When the agreement was returned to LaMartina, it had inserted, under "PACIFIC AGGREGATES, INC.," and above Blind's signature, the words "Peerless Park" with the initials "JB" beside them. Blind contends that LaMartina (presumably in Blind's presence) wrote in "Peerless Park" upon Blind's insistence that he did not want the contract to cover the operations at Gray Summit. LaMartina denied that he wrote those words in the contract. 3 Indeed, if LaMartina had, in fact, inserted the words in the contract as Blind testified, as a concession to Blind, I would have expected LaMartina to sign his own initials, and that Blind, as a good businessman who had won a point, would have insisted upon it, and affixed his own initials also. Further, the probabilities are against LaMartina's agreeing in this fashion that Pacific could run a nonunion operation in direct competition to a union operation, both in an area over which the Union had jurisdiction, particularly when Pacific might transfer union members back and forth between the two operations-as in fact Pacific regularly did. LaMartina in his testimony indicated that he may not have been aware of the Gray Summit operation at the time the contract was signed. Finally, the evidence is convincing that Pacific thereafter applied the union contract to the employees who were regularly employed at Gray Summit. 4 Indeed, Pacific thereafter signed two contracts with the Union-one of them while Pacific itself was still operating Gray Summit-without seeking the exclusion of that facility from coverage of the contract. Pacific did not stop making contributions to the fringe benefit funds for the Martins, employed at Gray Summit, until, in one case, Pacific shut down that facility, and in the other, when Franklin took over the operation of the facility. In support of its argument that Blind did not intend to have this agreement apply to Gray Summit, Respondents I Without discussing all the factual details litigated by the parties, it is sufficient to note that Pacific not only paid the contract scale to Martin Jr. and Martin Ill, who were regularly employed at Gray Summit, but also made contributions to the union health and welfare and pension plans as required by the union contract. Such contrinbutions would have been illegal in the absence of a written contract covenng those employees. See Sec. 302(aXcX5) of the Labor Management Relations Act, 1947. When the Umon complained at one point that Martin Ill was not receiving the contract scale of wages at Gray Summit. Pacific conceded and paid the wage the Union requested. 216 PACIFIC AGGREGATES, INC. point to the fact that, shortly thereafter, Pacific signed a contract with the Teamsters union specifically limited to Peerless Park. I was not impressed with Blind's explanation as to the reason he could not grant the Union a contract at Gray Summit without signing a contract with the Team- sters for that same facility. Respondents also note that the union shop steward at Peerless Park at one time told Blind that he did not think the union contract covered Gray Summit. However, the shop steward also testified that he did think that the contract covered that facility. In fact, as noted above, the shop steward did process grievances for employees working full time at Gray Summit. The shop steward sought to explain these various inconsistencies on the basis that he considered the contract to cover the union members while they were working at Gray Summit although he did not think the contract covered the facility. There is indication in Blind's testimony that he also adopted this dichotomy.5 I find this argument unaccept- able. In essence, it would permit management to unilateral- ly determine when the contract should be applied to working conditions at Gray Summit, and when it should not. Contrary to the purposes of the Act, this would tend to create turmoil, rather than stabilize working conditions. In fact this occurred when a new business agent of the Union, John Nava, who had succeeded LaMartina, came to Gray Summit when it was operated by Franklin and discovered nonunion employees working there, in his opinion in violation of the union agreement. Nava directed the union members on the site to leave, telling them that Respon- dents were not abiding by the contract, and that the operation was thus nonunion.6 Further, there is no functional reason why the two facilities should be considered separate units. The employ- ees at the two operations produced the same products, using the same skills and operating similar equipment. Employees were transferred between the two operations, almost all of the Peerless Park employees having worked at Gray Summit at one time or another, some of them even during the period Franklin ran the facility. Indeed, Gray Summit was under the supervision of the superintendent of Pacific, when Gray Summit was being run from Peerless Park. On one occasion, when Martin Jr. was laid off because of the shutdovn of Gray Summit, upon the complaint of the union steward that Martin Jr. had the oldest seniority in the unit, Martin Jr. was reinstated at Peerless Park. Upon the above, and the entire record, I find that the appropriate unit set forth in the bargaining agreement between Pacific and the Union included the operations at Gray Summit. IV. THE OPERATIONS AT GRAY SUMMIT The operations at Gray Summit and those at Peerless Park involved here are located in adjacent counties in Missouri, both on the shores of, or near, the Meramec I Blind testified that when he signed the onginal contract with the Union it was his intention to pay the contract scale and fringe contributions for union members working at Gray Summit although he asserts he did not intend that the contract apply to the operations at Gray Summit. 6 Respondents in their brief argue that Nava's statement shows that the Union did not consider the union contract applicable to Gray Summit. I River.7 As has been noted, both locations have been used to procure sand and gravel from the adjacent bodies of water and prepare it for sale or use. At Gray Summit it appears that supplies of sand and gravel were obtained by dragging a bucket arrangement (sometimes referred to in the record as a Sauerman) across the river on a cable anchored on the opposite shore. This material was conveyed a short distance to the sand and gravel "plant," which consists of an iron framework supporting a conveyor which takes the material to a hopper at the top from which the material is dropped through a number of screens of various sizes. The gravel is screened out according to size and falls (or is conveyed) into storage bins. The sand falls to the bottom where it is washed and then falls (or is conveyed) into storage bins. From these bins the material is later loaded into trucks for delivery to their destination. It would appear that while Pacific operated this location, in addition to the sand and gravel plant, it used a loader, two buckets or draglines (only one of which was used at any one time), a dump truck and a service truck, storage and office trailers, and some other small equipment and a boat with outboard motor to perform sand and gravel opera- tions. No other operations were performed at this location by Pacific between 1968 and the end of 1974, so far as the record shows. During this period, only Martin Jr. and Martin III were regularly employed at Gray Summit. Martin Jr. had been transferred from Peerless Park to Gray Summit at his request by the superintendent at Peerless Park. Martin III was hired about that time. As has been noted, the operation was supervised by the superintendent at Peerless Park. Other Peerless Park employees worked at Gray Summit from time to time as needed. The vast majority of the production of Gray Summit during this period was sold to Pacific Ready-Mix and Union Ready-Mix. It appears that deliveries to those places were made by the customer, who came and picked up the material. As has been noted Pacific closed down the Gray Summit operation at the end of 1974. However, in February 1975, officers and directors of Pacific formed Franklin Material for the purpose of reopening Gray Summit. Blind testified that the purpose of this was to reopen that location as a ready-mix operation. Why the formation of a new company for this purpose was necessary is not clear. The production of ready-mix concrete is a logical extension of the production of sand and gravel, and at least one of Respondents, Bayless, had previously been engaged in such an operation at or near Peerless Park. Franklin reopened Gray Summit in March 1975 pursu- ant to a lease from Pacific. Byron Schmidt was hired to run Gray Summit, as president of Franklin. He, in turn, hired the two Martins, upon the express condition that they secure withdrawal cards from the Union so that the operation could be run nonunion. In fact, it appears that for two weeks during this period before the Martins find to the contrary. Indeed, immediately thereafter, when Nava was advised that his action violated the no-strike clause of the union contract, he told the union members to go back to work at Gray Summit. I I have reference to the Official Highway Map of the State of Missouri, 1973, which shows that the communities of Gray Summit and Valley Park are about 20 miles apart. 217 DECISIONS OF NATIONAL LABOR RELATIONS BOARD secured their union withdrawals, Pacific paid them for their work at Gray Summit. Franklin paid the Martins at the union hourly wage scale but did not make contributions to the union health and welfare and pension funds as required by the union contract. During this time, some employees from Peerless Park worked at Gray Summit, Blind stating that Pacific paid their wages and benefits and charged Franklin for these costs. The plant and equipment described above continued to be used at Gray Summit as it had been by Pacific. Franklin also acquired a portable ready-mix plant from Brockway (according to G.C. Exh. 2), which had previously been used by Bayless at or near Peerless Park. According to the testimony of Martin Ill, which is credited, it was not before June 1975 that Franklin first began to produce ready-mix concrete. s Up to this point, Pacific Ready-Mix and Union Ready-Mix continued to be large customers for the sand and gravel produced at Gray Summit. Thereafter accord- ing to Abernathy, considering Franklin to be a competitor, they secured their materials elsewhere. In any event, it appears that thereafter the vast majority of the sand and gravel produced at Gray Summit was utilized by Franklin in its ready-mix operation. As simply described in the record, this operation consisted of supplying the ready-mix plant with gravel and sand and water in separate compart- ments in proper proportions, which were emptied into ready-mix trucks in suitable amounts, where they were mixed in the truck while in transit. To assist in these operations, Byron Schmidt's son, Todd, was hired to work at Gray Summit, as well as two part-time employees who were called in whenever needed to drive the ready-mix trucks. Martin III, in addition to performing his duties in respect to the sand and gravel operations as he had previously done for Pacific, also spent a considerable amount of time driving a ready-mix truck delivering that concrete to customers. Martin Jr. rarely drove a ready-mix truck, spending his time working at the sand and gravel operation as he had for Pacific and tending the ready-mix plant. During this time, two Peerless Park employees of Pacific were sent to Gray Summit, in September 1975, to build a permanent ready-mix plant. These were the two who were called off the job by Business Agent Nava because Franklin was not complying with the union contract at Gray Summit. Within a few days thereafter, as noted, they were returned to Gray Summit. For reasons not explained they did not complete the ready-mix plant. While at Gray Summit, however, the two did on occasion assist the Martins in their sand and gravel operations, at the request of Byron Schmidt. They were soon recalled to Peerless Park. At the time that Franklin shut down Gray Summit in December 1975, only Martin Jr. and Martin III were employed there. Blind asserted that the operation was terminated because it lost $18,000 during the period. However, during negotiations with Ned Abernathy to have him lease Gray Summit, Abernathy was told by Pacific that the loss was attributable to Respondents' attempt to produce ready-mix at that location, not from the sand and gravel operation. I Martin Jr. estimated it was "summertime." Blind thought it was begun in the "spring." Abernathy was approached by Eugene Henry, vice president of Pacific, in February 1976, in an effort to interest him in leasing the Gray Summit location as a source of sand and gravel. Abernathy became interested in this matter, he says, when he lost his normal source of supply of material for the two ready-mix plants, Pacific Ready-Mix and Union Ready-Mix, with which he was involved. Abernathy met with Henry on several occasions thereafter, including February 26, the date on which the hearing in this matter commenced, and on March 5, at which time he states there was an oral agreement between Henry and himself whereby he would lease the property, a small dragline (Sauerman), the gravel plant, the conveyor system, a diesel generator, scale, welding pump, office trailer, and storage trailer for I year with a 1-year option at a stated rental, and a royalty on material produced. However, because of disagreements over some of the terms to be included, the written lease for the rental of the property and equipment was not executed by the parties until after May 13, 1976. Although the record seems to establish that Franklin ceased operations at Gray Summit by the end of 1975, it is clear that Martin Jr. continued to do some work there during early 1976, probably as an employee of Pacific. Thus, when Abernathy came on the property on March 9, Martin Jr. was working there. When Abernathy ap- proached the Martins to work for him at Gray Summit, Martin Jr. called Blind to find out if he was still employed by Pacific and was told that "I was working for Pacific Ready-Mix.... He told me that [Ned] Abernathy had the Gray Summit plant and I had to negotiate with him on my wages." Abernathy testified that he originally had another man in mind to operate the Gray Summit facility-whose name he did not wish to disclose-but, when unable to secure his services, Abernathy approached the Martins and hired them. Abernathy offered them a straight salary, plus a commission of the net profits of the operation, in addition to certain insurance benefits. Abernathy told the Martins that the facility would be run nonunion. In the course of the discussions between Abernathy and Martin Jr. and Martin III with respect to their starting work for Abernathy at Gray Summit, the two men told Abernathy that they would have to be off from work the following week to go to a hearing in court because the Union "was involved in some kind of dispute with the gravel plant and we had to be off." The men said it involved Franklin Material and the Gray Summit opera- tion. Abernathy said that "it didn't concern him, that it was no problem for [the men] to get off." There was apparently no further conversation concerning this. The testimony of the Martins was that they are doing basically the same work at Gray Summit for Abernathy as they had for Pacific and for Franklin, except for the fact that Abernathy is not producing any ready-mix concrete at that location. The Martins began working for Abernathy at Gray Summit about March 10. Boulder was incorporated about March 15. The written lease for the premises and equipment was entered into in Boulder's name after the 218 PACIFIC AGGREGATES, INC. middle of May. Boulder has also acquired the right to mine sand and gravel from property directly across the river from Gray Summit. Pacific had previously held some rights to use this property but had let its lease lapse. Mark Abernathy, one of Ned Abernathy's sons, worked for a short time at Gray Summit. Martin Jr. also had permission from Abernathy to call another of his sons, Craig, who worked at Pacific Ready-Mix, to come to Gray Summit to assist in times of need. From the above and the entire record, it is evident and I find that the essential operation at Gray Summit was the production of sand and gravel. The only permanent structure at the site which has been in use by Pacific, Franklin, and Boulder, and is still being used, is the sand and gravel plant. Material is mined from the river in the same way as before, by much of the same equipment. The new equipment purchased by Boulder or Abernathy is of the same type and kind as that previously used by Pacific and Martin and is used for similar purposes, though of different sizes and capacities. The only addition to this operation was instituted by Franklin. However, the first 6 months of Franklin's operation of Gray Summit, Franklin also continued the same sand and gravel operation previously run by Pacific without change or addition. During the next 6 months, Franklin continued the same sand and gravel operation, but added a ready-mix operation, which used the material produced at the same location. This new addition was very obviously an experimental operation, utilizing portable equipment and trucks secured from other of Respondents' operations. The experiment did not work out, the portable equipment and trucks were removed, and finally the facility was again reopened by a new company, Boulder, which again mined and produced only sand and gravel at the site. Significantly during all this period the only two regular and permanent employees have been Martin Jr. and Martin III, who are still employed. I therefore find that the basic operation at Gray Summit during the tenure of Pacific, Franklin, and Boulder has been and remains unchanged in any substan- tial part. V. ANALYSIS AND CONCLUSIONS A. The Alleged Violation of the Act The record as a whole and the facts set forth are convincing and I find that Respondents, possibly in anticipation of starting a ready-mix operation at Gray Summit, decided to run that facility nonunion, and formed Franklin to achieve that purpose. This is shown by Byron Schmidt's statements to the Martins and the demand that they withdraw from the Union in order to continue to work at Gray Summit. Thereafter, Respondents refused and failed to apply the union bargaining contract to Gray Summit although, as has been found, that location was included in the unit covered by that contract. By so doing, Respondents, including Pacific and Franklin, repudiated the contract in substantial part and unilaterally changed its terms, withdrew recognition from the Union, and refused to bargain with the Union as to Gray Summit in violation of Section 8(a)(5) and (1) of the Act. B. The Successorship Issue Abernathy and Boulder, in taking over and reopening Gray Summit, as set forth above, with the same regular employees performing basically the same functions per- formed for Pacific and Franklin previously in mining and producing sand and gravel at that location, is a successor of Respondents in the operation of Gray Summit for the purposes of the Act. The fact that there may have been a lapse of about 2 months between the operation by Franklin and the resumption by Abernathy does not negate that conclusion. See C. G. Conn., Ltd, a wholly owned subsidiary of Crowell Collier and Mae Millan, Inc., 197 NLRB 442 (1972). Nor does the elimination of Respondents' experi- ment with ready-mix produced by temporary portable equipment involve a substantial change in the basic sand and gravel operation at Gray Summit. C. The Appropriate Unit The conclusions made above raise a problem concerning the appropriate unit and the Union's representation of the employees. As has been noted above, I find that, so long as Respondents operated the Peerless Park and Gray Summit facilities, the appropriate unit within the meaning of Section 9(b) of the Act included all the employees at Peerless Park and Gray Summit in the classifications covered by the union contract. However, as of March 9, 1976, the record shows that the Respondents ceased operating the Gray Summit facility. At least by March 10, 1976, Ned L. Abernathy was operating that facility. The evidence does not show that this arrangement with Abernathy was other than in good faith, nor is there sufficient evidence to show that Abernathy, or Boulder thereafter, was an alter ego of Respondents in the operation of Gray Summit. In these circumstances, I find that after Abernathy began operating Gray Summit, on March 10, 1976, the appropriate unit for the purposes of bargaining at Gray Summit, within the meaning of Section 9(b) of the Act, has been and is all of the employees employed by Abernathy or Boulder, or both of them, at the Gray Summit facility in the classifications described in the union contract with the exclusions set forth therein. Abernathy began operations at Gray Summit with Martin Jr. and Martin III. Therefore the obligation of Abernathy and Boulder to recognize and bargain with the Union depends, in part, on whether these two were represented by the Union at the time and, possibly, on whether Martin Jr. occupied a supervisory status for Abernathy and Boulder, leaving only a one-man unit. These two issues will now be considered. D. Union Status at Gray Summit After March 10 The two Martins had been members in good standing in the Union for a number of years until Franklin made it a condition of further employment at Gray Summit that they secure withdrawal cards from the Union. Even so, they did not totally sever their relationship with the Union, but became inactive. Abernathy continued this course of conduct by advising the Martins from the outset that he intended to continue to operate Gray Summit nonunion. 219 DECISIONS OF NATIONAL LABOR RELATIONS BOARD There is no evidence that the Martins did not desire to be represented, as they had been at Gray Summit when the Union secured for them the benefits of the union contract there. If Respondents had continued to apply the union contract to Gray Summit, as I find it should, there would be no question as to the Martins' union membership or the Union's representative status. In this situation, I find that it would frustrate the purposes of the Act to hold that these two did not desire the Union to represent them because they withdrew from active membership as a result of Respondents' demand, or that the Union thereby lost its representative status. It is therefore presumed and I find that their prior designation of the Union as their represen- tative under the union contract continued at the time they were employed by Abernathy to work at Gray Summit and thereafter at all times material herein. E. Supervisory Status of Houston Martin, Jr. Abernathy testified that, when he hired Martin Jr. and Martin III to operate Gray Summit, he told the former that he would be the general manager and the latter that he would be assistant manager. The indications are that these titles were less than serious in the circumstances. In response to a leading question, Abernathy asserted that Martin Jr. had the right to hire and fire. However, succeeding questions and the record as a whole make clear that this had reference to a specific occasion, when Abernathy's son Mark (who had been hired by Abernathy to work at Gray Summit for the summer) left to go back to school, and Abernathy told Martin Jr. that he could look around for someone to replace Mark. Martin Jr. did so, and located such a man, but in discussion with Martin III decided that another man was not needed. Except for this instance-and possibly some casual summer help not clearly explicated in the record-there is no indication that Martin Jr. had the authority on a general basis to hire anyone. Abernathy also told Martin Jr. that, if he needed Abernathy's son Craig (who was regularly employed at Pacific Ready-Mix) to come to Gray Summit to work on occasion, Martin Jr. could call him. On several occasions, Martin Jr. did ask Craig Abernathy to come to Gray Summit when there was need to remove mud and sticks from the sand and gravel being mined. However, there is no evidence of day-to-day direction or discipline of employees by Martin Jr, at Gray Summit.9 While em- ployed by Abernathy or Boulder, there is no evidence that Martin Jr. fired anybody. While Abernathy told Martin Jr. he was being employed to operate the plant, or to manage it in the circumstances present here, I would not find that this conferred supervisory authority within the meaning of the Act. The situation is that of a somewhat remote jobsite in the construction industry. The work tasks were simple and routine. Martin Jr. continued to do the manual tasks in producing sand and gravel he had always done and Martin s In response to a leading and suggestive question: "In the operation of the Gray Summit facility, who is it specifically who determines from day to day what the work schedule is going to be, what work is to be done and by whom?" Abernathy replied, "Houston Martin, Jr." In the absence of probative supporting detail, I have given this conclusionary evidence little weight. In fact, Abernathy had previously testified that the working III did the same. The relationship of Martin Jr. and Martin III, and the other few employees who came on the project for short times, was much like that of an experienced journeyman and his helpers. Abernathy visited the jobsite frequently and gave such orders and instructions as he thought necessary.l0 The fact that Abernathy gave Hous- ton Martin Jr. authority on one specific occasion to hire a helper-which was not done-would not transform him into a supervisor within the meaning of the Act. See Cast- A-Stone Products Company, 198 NLRB 484 (1972). Upon these facts and the record as a whole, I find that while working for Abernathy and Boulder Houston Martin Jr. was not a supervisor within the meaning of the Act. F. Boulder's Alleged Remedial Obligation General Counsel contends that, at the time Abernathy and Boulder took over the operation of Gray Summit, they were aware of the unfair labor practice proceeding here involved. Abernathy denies this. It is admitted, however, that Abernathy, and therefore Boulder, was aware of this proceeding before the formal lease for Gray Summit was signed by Abernathy for Boulder, but it is asserted in his brief that under Missouri law "a verbal lease followed by possession is binding for one year. Jenkins v. Womach, 107 S.W. 423," and therefore the lease in fact was effective before Abernathy had knowledge of the unfair labor practice. Before Abernathy took possession of the Gray Summit operation, however, he was informed by the Martins that there was a hearing "in court" involving a dispute between the Union and Franklin concerning the operation of Gray Summit, and that the two men would have to be off work to attend. Abernathy replied only that it did not concern him and that the men could take off for the hearing. The content of this conversation, the circumstances, and, in particular, the singular lack of any curiosity on Aberna- thy's part concerning this request, convince me that Abernathy knew or had information concerning the pendency of the present matter before entering into the operation of Gray Summit. It must be recalled that this was not an instance in which two out of many employees were requesting time off. This was a case of the entire work force asking off at a time when the record shows that Abernathy was concerned with securing the production of Gray Summit. That Abernathy did not ask the reason that the Martins insisted upon shutting down Gray Summit so shortly after they were hired indicates that he thereby sought to insulate himself from the proceedings and the responsibilities which might flow from public affirmation of knowledge of such proceedings. In these circumstances, I find that Abernathy knew, or should be charged with knowledge, of the pendency of these proceedings prior to the time he took possession of the Gray Summit operation. For the purposes of the administration of the Act, in any event, I find that the managing officer of Boulder was schedule was set from the beginning, stating, "They were going to operate the plant from 7:30 to 4 o'clock or 4:30, normal operating hours." The indication in the record, indeed, was that, if Martin Jr. wanted to take time off for personal reasons, he would consult Abernathy. io Abernathy asserted that he was not experienced in the operation of a sand and gravel facility. 220 PACIFIC AGGREGATES, INC. aware of the pendency of these proceedings prior to the time Boulder became obligated to lease the Gray Summit operation, so that Boulder may be held responsible for remedying any unfair labor practices of Respondents at Gray Summit, even if Abernathy were held excused. The General Counsel contends that Abernathy and Boulder, as successors to Respondents in the operation of Gray Summit, should be required to recognize and bargain with the Union as to Gray Summit and to apply the terms of the Union's contract with Pacific to the operations at Gray Summit, citing principally, Golden State Bottling Company, Inc. v. N.L.R.B., 414 U.S. 168 (1973). However, I am rather convinced that these issues are controlled by the Supreme Court's decision in N.LR.B. v. Burns Internation- al Security Services, Inc., 406 U.S. 272 (1972), which the Court in Golden State took pains to note was not in conflict with the later decision in Golden State. In Burns, the Court held that the respondent there, a bona fide successor to an employer holding a bargaining contract with a union, was not obligated to assume the predecessor's contract, al- though it was obligated to bargain with the union which represented a majority of the successor's employees in an appropriate unit. For the reasons set forth in Burns, I find that Boulder and/or Abernathy, bona fide successors to Respondents at Gray Summit, are not obligated to assume the predecessors' bargaining contract. However, as it has previously been found that the employees employed at Gray Summit constitute an appropriate unit for collective bargaining," and the entire work force hired by Abernathy to resume operations at Gray Summit at the outset were represented by the Union, Abernathy and/or Boulder may properly be held responsible for remedying Respondents' refusal to bargain with the Union concerning wages, hours, and other terms and conditions of employment at Gray Summit. CONCLUSIONS OF LAW 1. The Respondents, as described hereinabove, consti- tute a closely integrated enterprise which is an employer within the meaning of Section 2(2) of the Act, engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. Ned L. Abernathy and/or Boulder Sand and Gravel Company is a successor to the Respondents in the operation of the facility at Gray Summit, Missouri, described hereinabove, for the purposes of effectuating the purposes of the Act. 3. The Union is a labor organization within the meaning of Section 2(5) of the Act. 4. At all times material to this proceeding, until March 10, 1976, the Union has been the exclusive bargaining representative of all of the employees in the following appropriate bargaining unit within the meaning of Section 9(a) of the Act: All engineers, oilers, firemen, mechanics, and mechan- ics helpers employed by Respondents at Peerless Park " The fact that Gray Summit was formerly a part of a larger unit covered by a bargaining contract does not detract from the finding that after it was acquired by Abernathy/Boulder it constituted a separate appropriate unit, nor does it affect the successors' obligation to bargain with respect to and Gray Summit, Missouri, exclusive of executives, supervisory employees, superintendents, foremen, tech- nical and research employees, office employees and laborers. 5. Since March 10, 1976, the Union has been and continues to be the exclusive representative of all the employees in each of the following appropriate bargaining units within the meaning of Section 9(a) and (b) of the Act: (a) All employees of Ned. L. Abernathy and/or Boulder Sand and Gravel Company at Gray Summit, Missouri, in the classifications included in the unit described above. (b) All employees of Respondents at Peerless Park, Missouri, in the classifications included in the unit described above. 6. By failing and refusing to apply the terms of its collective-bargaining contract with the Union to its operations at Gray Summit, Missouri, from March 1975 until March 10, 1976, and thereby withdrawing recognition from and refusing to bargain collectively with the Union as the exclusive bargaining representative of employees in the appropriate unit set forth in Conclusion of Law 4, above, Respondents violated Section 8(aX5) and (1) of the Act, which unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. THE REMEDY Having found that the Respondents have engaged in unfair labor practices in violation of the Act, it will be recommended that they cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. It has been found that Respondents failed and refused to apply its bargaining agreement with the Union to its Gray Summit facility at the end of 1974 in violation of Section 8(a)(1) and (5) of the Act. General Counsel requests, inter alia, that Respondents be ordered to make "all pension and health and welfare contributions, as provided by its contract with the Union, which it failed to pay on behalf of its employees who operated the facility for Franklin," citing Hen House Market No. 3, 175 NLRB 596 (1969); Howard Johnson Company, 198 NLRB 763 (1972); and Walter E. Heyman d/b/a Stanwood Thriftmart, 216 NLRB 852 (1975). The Board, in Thriftmarl, stated the principle as follows at 854: The appropriate remedy for Respondent's unilateral action in discontinuing contributions to the welfare and pension plan, just like the appropriate remedy for any other unlawful unilateral action, is, where feasible, to reinstate the status quo ante. .... For these reasons we shall order Respondent to make whole the employees in the unit by paying all pension and welfare contribu- such a unit. See Darrame J. Benzchowel e al. d,/ba Parkwood IGA, 201 NLRB 905 (1973), enfd. sub nom, Zims Foodliner Inc. d/b/a Zim's IGA Foodliner v. N.LR.B., 495 F.2d 1131 (C.A. 7. 1974). 221 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tions, as provided in the collective-bargaining agree- ment. I am aware, however, of the Board's decision in Colleti Color Prints, Inc., 204 NLRB 647 (1973), which holds, seemingly inconsistent with the above, that if the union has ceased to be the bargaining representative in the unit there is no further obligation on the part of a respondent to make payments into such fringe benefit funds, though unlawfully withheld in the first instance, unless there is a showing that the employees in the unit suffered loss thereby. In 1976, Respondents leased Gray Summit to a bona fide lessee-successor which continued to employ all of the employees at that facility employed by Respondents prior to the lease. It has been found that the Union continued to be the bargaining representative of the employees at that operation. Assuming the Board's opinion in Colleti survives the later decision in Thriftmart (which states the Board's established principle), I find that the employees at Gray Summit did, in fact, suffer loss by reason of Respondents' failure and refusal to contribute to the pension and welfare funds as required by the bargaining agreement. Thus the Board and the courts have long held that contributions to fringe benefit trust funds such as those involved here are the equivalent of wages which the employees have earned by their labor. See Hen House Market, supra; Artim Transportation System, Inc., 193 NLRB 179, 184 (1971). In essence, the unit employees in such situation have agreed, through their bargaining representative, that this part of their compensation shall be paid into the various funds. These funds redound to the benefit of the entire unit as well as the individual. Indeed, the individual may for one reason or another never receive any personal benefit from these funds. He nevertheless has an interest in the continuance of the funds and their financial stability, for as long as he remains in the industry he may benefit thereby. The return to these funds of contributions the Respondent was obligated to make in the first instance would merely constitute the return of that part of the employees' wages to the funds which the employees had designated for that purpose in the first instance. In a similar situation, in which an employer was disputing the authority of the Board to order payment of like fringe benefits, the Supreme Court, in N.L.R.B. v. Strong Roofing & Insulating Co., 393 U.S. 357, 360 (1969), Stated: The fact that the payments in question here did not constitute direct pay to the employees is irrelevant in our view of this case. Whether the payments were made to the employees, who then contributed them to union trust funds in the form of higher union dues, or whether as here they passed straight from the employer to the trust funds, the final result is the same. And it is just as much in the interest of "effectuat[ing] the policies of this Act," and of making the employees whole, to require the payments in either case. 1 In the event no exceptions are filed as provided by Sec. 102.46 of the Rules and Regulations of the National Labor Relations Board. the findings, conclusions, and recommended Order herein shall, as provided in Sec. Obviously, such payments would not constitute a penalty on the Respondents inasmuch as they are required to contribute only what they were obligated to pay in the first place. Indeed, if Respondents are relieved of such pay- ments which they were obligated to make, to that extent they are enabled to profit by their own unfair labor practices and subvert bargaining practices which it is the purpose of the Act to encourage and protect. It having been found that Respondents failed and refused to recognize and bargain with the Union in violation of the Act by failing and refusing to apply its collective-bargaining agreement with the Union to employ- ees in the appropriate unit at Gray Summit, Missouri, it will be recommended that (1) Respondents, or their successors in the operation of the Gray Summit facility, shall recognize and bargain with the Union for the employees in the appropriate unit at the Gray Summit facility; (2) should Respondents resume operation of the Gray Summit facility during the pendency of the current bargaining agreement with the Union, or any successor contract thereto, Respondents shall apply the terms and conditions of that bargaining agreement to such employ- ees; (3) Respondents shall make whole the employees in the appropriate unit employed at the Gray Summit facility until March 10, 1976, by paying all pension and health and welfare contributions, as provided in the collective-bar- gaining agreement, which have not been paid. Upon the foregoing findings of fact, conclusions of law, and the entire record, and pursuant to Section 10(c) of the Act, I issue the following recommended: ORDER 12 Pacific Aggregates, Inc. and its affiliates, including Franklin Material Company, Respondents herein, their officers, agents, successors, and assigns, including Ned L. Abernathy and/or Boulder Sand and Gravel Company, Gray Summit, Missouri, their officers, agents, successors, and assigns, shall: I. Cease and desist from: (a) Refusing to bargain collectively with or withdrawing recognition from Local 513, International Union of Operating Engineers, AFL-CIO, the Union herein, as the exclusive representative of all the employees employed by such employer at the Gray Summit, Missouri, facility described hereinabove in the following classifications: All engineers, oilers, firemen, mechanics, and mechan- ics helpers, exclusive of executives, supervisory employ- ees, superintendents, foremen, technical and research employees, office employees and laborers. (b) Refusing or failing, in the event that Respondents resume operation of the Gray Summit facility during the pendency of the bargaining agreement with the Union expiring April 30, 1978, or any successor contract thereto, to apply the terms and provisions of such bargaining contract to the employees engaged at the Gray Summit facility in the classifications set forth in subparagraph (a) 102.48 of the Rules and Regulations, be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes. 222 PACIFIC AGGREGATES, INC. immediately hereinabove, and refusing to pay contribu- tions to the pension and health and welfare funds as provided by such agreement. (c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act. 2. Take the following affirmative action which it is found will effectuate the purposes of the Act: (a) Upon request, bargain with the Union as the exclusive representative of all the employees employed by such employer at the Gray Summit, Missouri, facility in the classifications set forth hereinabove in paragraph l(a) of this Order with respect to rates of pay, wages, hours of employment, or other conditions of employment. (b) In the event that Respondents resume operation of the Gray Summit facility during the pendency of the bargaining agreement with the Union expiring April 30, 1978, or any successor contract thereto, apply the terms and provisions of such bargaining agreement to the employees engaged at the Gray Summit facility in the classifications set forth in paragraph l(a) of this Order. (c) Make whole the employees employed by Respon- dents at the Gray Summit facility until March 10, 1976, in the classifications set forth in paragraph 1(a) of this Order, by paying all pension and health and welfare contributions, as provided in the collective-bargaining agreement with the Union, which have not heretofore been paid. (d) Post at the Gray Summit facility copies of the attached notice marked "Appendix." 13 Copies of said notice, which shall be duly signed by a representative of Respondent Pacific Aggregates, Inc., and by a representa- tive of Boulder Sand and Gravel Company on forms provided by the Regional Director for Region 14, shall be posted by Boulder Sand and Gravel Company immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicuous places, includ- ing all places where notices to employees are customarily posted. Reasonable steps shall be taken to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 14, in writing, what steps have been taken to comply with this Order. i: In the event the Board's Order is enforced by a Judgment of the United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government WE WILL NOT refuse to recognize or bargain with Local 513, International Union of Operating Engineers, AFL-CIO, as the exclusive bargaining representative of employees whom we employ at Gray Summit in the following classifications: All engineers, oilers, firemen, mechanics, and mechanics helpers, exclusive of execu- tives, supervisory employees, superintendents, foremen, technical and research employees, office employees and laborers. WE WILL NOT, in the event that Pacific Aggregates, Inc., or one of its affiliates resumes the operation of Gray Summit, while there is a current contract with the Union in effect, refuse or fail to apply the terms of that contract to the employees at Gray Summit in the classifications set forth above. WE WILL NOT, in any like or related manner interfere with, restrain, or coerce employees in the exercise of rights guaranteed under the National Labor Relations Act. WE WILL, upon request, bargain with the Union as the exclusive representative of our employees at Gray Summit in the classifications set forth above. WE WILL make whole the employees employed by Pacific Aggregates, Inc., or its affiliate Franklin Material Company, until March 10, 1976, at Gray Summit in the classifications set forth above by paying all pension and health and welfare contributions, as provided in the contract with the Union, which have not been paid. PACIFIC AGGREGATES, INC. BOULDER SAND AND GRAVEL COMPANY 223